fy2018 medium-term management plan power electronics … · fy2018 medium-term management plan...

©2016 Fuji Electric Co., Ltd. All rights reserved. 11

May 26, 2016Fuji Electric Co., Ltd.

Power Electronics Business Group

FY2018 Medium-Term Management PlanPower Electronics Business


■Business Overview■Review of FY2015 Medium-Term

Management Plan■FY2018 Medium-Term Management Plan

・Basic policies・Business Targets・Market Trends ・Priority Measures・Capital Investment / Research and Development

Contents


Business Overview

3

©2016 Fuji Electric Co., Ltd. All rights reserved.©2016 Fuji Electric Co., Ltd. All rights reserved. 4

Power and Social Infrastructure

Solar power

Industrial InfrastructureDC

substations Steel plantsIDC Motion / FAWind power

Transportation

Programmable operation displays

EV systems

Small / switching power suppliesMedium-voltage

inverters

Small industrial

motors

Medium- to large-scale industrial motors

DC power supply systems (DC-UPSs)

Power Semiconductors

Switchgears and controlgears

Plant Products

Distribution

Incubation Models

Business Overview

SiCmodules

7th-generation IGBT modules

Motion / FA

Magnetic contactors

Molded-case circuit breakers

Controllers

Servo systems

Uninterruptable power systems (UPSs)Power conditioning

sub-systems (PCSs)(Leading domestic share*)

(Leading domestic share*)

(No. 2 domestic share*)

(No. 2 domestic share*)

(No. 1 domestic share*) (No. 2 domestic share*)

Vacuum circuit breakers

Power ElectronicsBusiness Group

Blue: Drives; Green: Power supplies; Purple: ED&C components

* Market share information from FY2015; Source: Fuji Electric

Low-voltage inverters


Review of FY2015 Medium-Term

Management Plan

5

©2016 Fuji Electric Co., Ltd. All rights reserved.

Review of FY2015 Medium-Term Management Plan

6

1.1%

3.8%

176.4203.0

176.4203.0

2.0

7.8

28%32%

+26.6

+4.6

+17.6

+6.8

Change+26.6

+16.3

+10.2

Change

+5.8Change

-2.9 -5.3-2.9 -5.3

Net Sales in Japan / Overseas (Billion yen)

Net Sales by Subsegment(Billion yen)

Operating Income / Operating Margin (Billion yen)

ED&CComponents

Power Supply

Drive

Consolidated adjustment

67.5

37.5

74.2

72.1

55.1

81.0

Overseas

Japan

※Figures for FY2012 reflect the organizational restructuring conducted in FY2015.

Ratio of overseas

sales

49.5

126.9

65.8

137.1

Higher sales in all subsegments, overall net sales up 15% and operating income 4 times higher

Low operating margin

FY2015Results

FY2012Results

FY2015Results

FY2012Results

FY2015Results

FY2012Results


Review of FY2015 Medium-Term Management Plan

Establishing a profitable structure Creating new products suited to global market

Business restructuring・Strengthened constitution by reducing fixed costs and advancing

Pro-7 activities Global system construction

・Expanded business through M&As and collaborationJoint venture with Shanghai Electric in China, Fuji SMBE in Asia

・Promoted local production and consumption3-hub manufacturing structure (Japan, China, and Thailand)established with start of operations at Thailand Factory

Tracking related to plant products (medium- to large-scale industrial motors, medium-voltage inverters, PCSs, switchgears and controlgears)・Tracked costs, deliveries, and quality

Shift from business restructuring to business expansion

Challenges


FY2018 Medium-Term Management Plan

8


Basic policies for Medium-Term Management Plan

9

Achieve operating margin of 7%

Reinforce profit structure

Expand global operations Reap benefits of M&As and collaboration Develop and launch new products boasting

market competitiveness Expand into new fields


Business Targets

10

4.5%

7.0%

209.0233.4

＋13.9

+7.5

+9.6

+14.9

＋1.4

209.0233.4+24.4 +24.4

-6.4 -4.8-6.4 -4.8

+6.932%

35%

Net Sales in Japan / Overseas (Billion yen)

Net Sales by Subsegment(Billion yen)

Operating Income / Operating Margin (Billion yen)

ED&CComponents

Power Supply

Drive

FY2015(After reclassification*)

Consolidated adjustment

FY2018Medium-Term

Management Plan



9.4

16.3

72.1

55.1

88.2

79.6

56.5

102.1

66.3

142.7

81.2

152.3

Overseas

Japan

Change Change ChangeRatio of overseas

sales

*Figures for FY2015 have been restated to reflect organizational restructuring conducted in FY2016.Restructuring details: Change of segment responsible for controllers (industrial instrumentation equipment → power electronics)

FY2018Medium-Term

Management Plan

FY2018Medium-Term

Management Plan

© Fuji Electric Co., Ltd. All rights reserved. 11

Drive / Power Supply

11©2016 Fuji Electric Co., Ltd. All rights reserved.


Japan: Strong growth expected China: Currently stagnant conditions, delayed recovery centered on air-conditioning equipment

and elevators Asia: Growth focused on infrastructure investment despite impacts of sluggish Chinese market Europe / Americas: Lingering opaqueness in oil and gas fields due to low price of crude oil

12

Region/country

CAGR（FY2016-FY2018） High-growth fields

Japan 103% ・Gentle growth focused on fan and pump industries

Overseas

China 100% ・Continuation of favorable motion market conditions due to automation needs

Asia 106% ・Growth focused on air-conditioning equipment and elevators

Europe 104% ・Ongoing recovery trend

Americas 104% ・Continuing growth

Drive Market Trends - Inverters

(CAGR and market scale figures represent the Company’s estimations based on data from forecast institutions related to each equipment category)


Region/country


Japan 101% ・ Solid trend in IDC establishment・ High anticipations for IoT-related demand

Overseas

China 103% ・ IDC and infrastructure investment

Asia 103% ・ Accelerated infrastructure development・ Favorable IT investment trends

North America 102%

・ World’s largest market・ Firm demand for cloud-based and other medium-

scale IDCs

Power Supply Market Trends – UPSs

Japan: Sluggish replacement demand in manufacturing industries North America: Austere environment for large-scale IDC investment Asia: Accelerated infrastructure investment despite impacts of sluggish Chinese

market



Drive / Power Supply - Priority Measures

Grow motion and FA operations Develop component service operations Start up new businesses (EV systems, DC power supply systems)

Reduce costs through rigorous standardization Strengthen domestic mother factories

Expand global operations by stepping up M&As and collaboration

Expand into new fields

Develop and launch new products boasting market competitiveness

Strengthen global marketing Quickly develop and launch products using standardization platforms

Grow Asian system operations (Fuji SMBE, Fuji Gemco) Develop North American railway operations (Fuji SEMEC)


Asia

Europe

China

Americas

2015年 2018年

2015年 2018年

2015年 2018年

2015年 2018年

FY2015 FY2018

FY2015 FY2018

FY2015 FY2018

FY2015 FY2018

Power Supply

Drive

Power Supply

Drive

Power Supply

Drive

5.56.5

12.515.5

4.5

8.5

25.530.0

Net Sales (billion yen)

Americas・ Railroads: Fuji SEMEC・ UPSs: New product launches

China・ Shift focus toward motion and FA・ Drives: Joint venture with Shanghai Electric

Asia・ Drives: Fuji SMBE, Fuji Gemco, Fuji CAC・ System boards: Fuji SMBE

Europe・ Inverters / servos: Collaboration

Railroads

UPSs

Other drives

Step up M&As and collaboration and reap benefitsAsia: Expand system operationsNorth America: Grow railroad and UPS operations

Expansion of Global Operations

© Fuji Electric Co., Ltd. All rights reserved.

大連工場(回転機）

・Low- and medium-voltage inverters

2013～

2015～

・Inverters

2016～

2016～

ChinaThailandIndia

USA

USA2016～

Japan

China

Singapore2015～

： Central production base

：Regional production base

Germany

16

Expansion of Global Operations-Reinforcement of Local Production and Consumption Systems

(Fuji Electric Europe)

・Inverters

(Fuji Electric India) (FMT / Thailand Factory)

・Inverters, power supplies

(Fuji SMBE)

(Fuji Electric Corp. of America)

・Switchboards

・Inverters, switchgears, and controlgears

・Electrical equipmentfor railcars

(Fuji SEMEC)

・Railcar doors

・Components

(Suzuka Factory)

Japan(Kobe Factory)

・Systems

Strengthen component and system production structures around the world(Ratio of overseas production: 36%)

(Dalian Factory)

(Wuxi Factory)

・Industrial motors

Fuji CAC(Vietnam)

Fuji Gemco(India)


Fuji Electric(Thailand)

Fuji Tusco(Thailand)

Fuji Gemco(India)

Fuji Electric Singapore

Fuji CAC(Vietnam)

Commencement of switchgear and controlgearproduction

Expansion of Global Operations - Asia

盤

Commencement of knock-down inverter production

★Sales base

★

★

Provide component products that contribute to the expansion of system operations Introduce drive products matched to each market Increase local production and consumption

Asia: Thailand Factory India: Fuji Electric India

Production base

Engineering base

M&A

M&A

M&A

Fuji SMBE(Singapore, Malaysia,

Australia)Switchboards

Joint-development, expansion of

models produced

ThailandFactory (FMT)

M&A

InvertersFuji Electric India

Controllers

Switchgears and controlgears


Fuji Electric Corp. of America★

Production base

Fuji Electric Corp. of America Virginia Factory

Electrical equipment for railcars

Expansion of Global Operations - North America

Fuji Electric Corp. of America(Fremont, CA)

★

Fuji Electric Corp. of America

New York Factory(Fuji SEMEC)


M&A

Sales base★

Localize areas of operations ranging from sales activities for soliciting our specifications to markets to production activities

Conduct integrated production at Fuji SEMEC’s New York Factory Introduce SiC-equipped products into target projects

Improve development efficiency and reduce costs through extensive platform construction

Evolve product planning (step up coordination with local sites) Develop SiC-equipped platforms to bolster model lineup in short period Enter rapidly growing market for small to medium-scale data centers

Construct sales and service systems utilizing sales agent networks

Expand railway operations

Introduce medium- to large-capacity UPSs


Model factory for creating new products and pursuing productivity improvements・Create high-value-added components・Pursue high levels of productivity and reduced costsAutomation, production technologies, and manufacturing technologiesIn-house manufacturing for core technologies

19

Strengthening of Domestic Mother Factories- Standardization and Cost Reduction

Model factory for producing complete systems and pursuing increased speed・ Use of continuous flow processingEngineering, Design, Procurement, Testing, and Witness Inspection/ShippingOne stop operation spanning order receipt to shippingSingle facility housing processes spanning from order receipt to shipping・ Conduct mixed production of switchgears and controlgears

Component Models—Mother factory: Suzuka Factory—

[Major products]

Industrial motorsInverters Small-capacity power suppliesServo systems


[Related Bases](Japan) Hakko Electronics, Fuji Electric FA Service(Overseas) Thailand Factory, Wuxi Factory, joint venture

with Shanghai Electric, Fuji Electric Motor (Dalian) factories , Fuji Electric India, Fuji Electric Europe, Fuji Electric Corp. of America, Fuji Gemco

Rationalize operations by reorganizing and consolidating manufactured models Generate synergies with development function consolidation (Power Electronics Technical Center)

Quickly introduce products for the global market and accelerate standardization and shift to in-house production

Launch incubation models and achieve profitability

[Related Bases](Japan) Tsukuba Factory, Ibaraki Fuji(Overseas) Thailand Factory, Fuji SMBE, Fuji Gemco

System Models—Mother factory: Kobe Factory—

Switchgears and controlgearsUninterruptiblepower systems (UPSs)

Power conditioning sub-sysmtes (PCSs)

[Major products]

© Fuji Electric Co., Ltd. All rights reserved.©2016 Fuji Electric Co., Ltd. All rights reserved.

Quick Launch of New Products for Global Market(Establishment of Power Electronics Technical Center)

Quickly create new products by developing platforms Promote rigorous standardization (halve range of parts)

20

Fundamental device technologies

Device application technologies

Shared technologies

■Parallel modules ■Gate drive circuits■Cooling structures ■Protection circuits ■Busbar structures

Small-capacity platforms Large-capacity platforms

Standalone main

circuits

Medium- to large-capacity UPSs / PCSsHigh-voltage invertersS

ystems

Low-voltage switchgearsand controlgears

Industrial plant inverters

Com

ponents


Power Electronics Technical Center

Small power supplies

Automobile power supplies Servos

Inverter-embedded motors

High-frequency insulated power supplies

Propulsion systems

Induction heating power supplies

Product deploym

ent

Product develop

ment

Fundamental

technology

development

Semiconductors

Scheduled completion: August 2016 Total floor space: More than 20,000 m2

2%

41%

59%

1%

28%

44%

10%

28%17%28%

2015年 2018年 2020年

Small-capacity power suppliesMedium- to large-capacity UPSs / PCSs

Electrical equipment for railcarsInverters / servos

Ratio of Power Semiconductors Employing SiC / 7th-Generation Modules

Power semiconductorsFY2015 FY2018 FY2020


FY2016 FY2017 FY2018

InvertersServos

21

Development Roadmap

FY2016 FY2017 FY2018

UPSs

DC-UPSs

Small-capacity all-SiC-PF

Large-capacity all-SiC-PF

7th-generation IGBT-PF

★IP6X

★Large-capacityInverters

Small-capacity SiC Trench-PF

N-Servos

★Servo

General-purposeInverters ★

★General-purposeInverters

FY2016 FY2017 FY2018

Railway High-speed railway propulsion system all-SiC-PF

High-frequency insulated power supply all-SiC★

★IGBT

Hybrid-SiC-PF

Large-capacity SiC-PF

Module design

★ 300kVA

★750kVA

★1000kVA★600kVA

★500kVA Japan

Industrial SiC-PF

Customization for North AmericaIT SiC-PF

Customer-specific responses

Meduim-capacity SiC-PF ★100–200 kVA

North America

Quickly develop and launch products using standardization platforms Launch differentiated products by utilizing new devices (SiC / 7th-generation modules)

★250kVA

©2016 Fuji Electric Co., Ltd. All rights reserved.PF:Platform

North America

© Fuji Electric Co., Ltd. All rights reserved.©2016 Fuji Electric Co., Ltd. All rights reserved.

Expansion into New Fields - Motion and FA

22

Steel plants

Expand motion and FA operations by integrating components (servos, inverters, industrial motors, controllers, programmable operation displays)

Programmable operation displays

Small industrial motors

Motion


Assembly factories

Transportation

Distribution centers

IoT

Servo systems

Controllers

Magnetic switches Molded-case circuit breakers

Motion / FA


Expansion into New Fields - Component Services

23

System for providing support 365 days a year

Technical consultations

Malfunction consultations

・Technical staffDevelopment / design representatives

・Malfunction support staff

Former Fuji Electric employees

Establishment of technical service centers

Existing call centers

Customers / agents

Transmission of information to sales representatives

Reinforcement of customer support systems

(Ex.) Printing machines

・Exhibit demo products for specific industries・Incorporate customer input into product

development・Solicit appeal of application and engineering

capabilities

Establishment of demo centers for specific industries

Strengthening of customer relationships (emphasis on reciprocal communication)

Initial receptionist



Region/country


Japan 101%・ Renovation of aged facilities・ Construction demand stimulated by 2020 Tokyo

Olympics

Overseas

China 100-102% ・ Automation investment

Asia 104-105%・ Electricity distribution and other infrastructure

projects・ Factory and building construction demand

Korea/Taiwan 100-102% ・ Projects primarily related to China

ED&C Components Market Trends

Japan: Mature market China: Currently stagnant conditions, recovery in FY2017 and beyond Southeast Asia: Strong growth focused on infrastructure investment despite instability South Korea / Taiwan: Heavily influenced by Chinese market conditions



ED&C Components - Priority Measures

● Thoroughly strengthen manufacturing capabilities・ Reconstruct overseas logistics networks to improve deliver services・ Develop model factories utilizing IoT technologies

● Quickly launch differentiated products・ Develop products matched to market needs・ Promote joint development with Schneider

● Expand sales・ Invigorate network of 1st- and 2nd-tier sales agents・ Increase presence in power distribution field


Achieve same 3-day deliveries possible in Japan through establishment of Assemble and logistic centers (ALCs) in China and Southeast Asia

Thorough Strengthening of Manufacturing Capabilities- Reconstruction of Overseas Logistics Networks

Asia ALCs

China ALCs

Fukiage / Ohtawara ALCs

Dalian Factory

Southeast Asia

China

<Establishment schedule>FY2016: China ALCsFY2017: Asia ALCs

27

Changshu Factory


Expansion of Sales- Increasing of Presence in Power Distribution Field

Step up approach toward facility owners, general contractors, subcontractors, and consultants Redouble efforts to acquire orders by utilizing unique products and have Fuji Electric

designated in specification documents

Accelerate approach utilizing unique products as “door openers” for approaching business operators, facility owners, and end users

Develop systematic approach for acquiring orders for low-voltage ED&C components contained in switchgears and controlgears (have Fuji Electric designated in specification documents)

BusinessoperatorsFacilityowners

End users

ConsultantsDesign firms

Generalcontractors

Subcontractors

Switchgearand

Controlgearmanufacturers

Low-voltage ED&C components contained in

switchgears and controlgears

“Door openers”(Ultrahigh-voltage equipment, busway systems,

electricity monitoring equipment, etc.)


Capital Investment/ Research and Development

29


Capital Investment(Billion yen)

Research and Development(Billion yen)

30

Change

＋5.2Change

+0.125.530.7 32.0 32.1

Note: Figures for R&D expenditures above have been divided by segment based on theme and may therefore differ from the figures contained in the consolidated financial report for the fiscal year ended March 31, 2016.

FY2016–2018Aggregate




Capital investment・ Establish Power Electronics Technical Center

Shorten development lead times, generate technological synergies, and strengthen coordination with customers by assembling technology development representatives

・ Enhance local production and consumption systems R&D・ Expedite development and reduce costs by drastically revising product plans and developing platforms

・ Power Electronics Technical Center (Suzuka)・ Production equipment at U.S. and Thailand

factories

・ SiC-employing equipment (railway, UPSs)・ Motion and servo equipment・ DC power supply systems (DC-UPSs)

Capital Investment / Research and Development


Disclaimer

1. Statements made in this documents or in the presentation to which they pertainregarding estimates or projections are forward-looking statements based on the company’s judgments and assumptions in light of information currently available. Actual results may differ materially from those projected as a result of uncertaintiesinherent in such judgments and assumptions, as well as changes in businessoperations or other internal or external conditions. Accordingly, the company gives noguarantee regarding the reliability of any information contained in these forward-looking statements.

2. These documents are for information purpose only, and do not constitute an inducement by the company to make investments.

3. Unauthorized reproduction of these documents, in part or in whole, is prohibited.

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